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Sugarcane ethanol is an alternative to fossil fuels that can mitigate greenhouse gas emissions and offer socioeconomic benefits, but at the same time have a series of negative impacts. Brazil is the second largest producer of fuel ethanol globally, with this production predicted to almost double over the next 15 years. However sugarcane ethanol production in the country has been shown to interact with a range of ecosystem services. It is only when such interactions are understood that we can fully determine the potential trade-offs, synergies and sustainability outcomes of biofuel production in the country. This paper explores the local perceptions about the impacts of sugarcane production on ecosystem services in two municipalities in the state of Sao Paulo with significant sugarcane production: Capivari and Rancharia. Impact perceptions have been elicited through interviews with local residents, with the results showing that perceptions vary between the two study sites and are affected considerably by the different local experiences with sugarcane production. For example, although sugarcane farming has been traditionally performed in Capivari, it has been Rancharia that has experienced more recently a rapid sugarcane expansion that has caused considerable changes in land use and farming patterns. Interview results also suggest that the negative effects of sugarcane farming can be reduced through the adoption of good agricultural practices and the enforcement of existing laws, as many respondents cited considerable improvements in ecosystem health from such actions. Assessing the perception of local communities such as the one reported in this paper can be crucial in designing policies and planning land uses that enhance the sustainability of biofuel production. [ABSTRACT FROM AUTHOR]